Community One, which had $159 million in assets and 21,098 members making it the state's seventh largest by asset size, was doomed by troubles with its loan portfolio. The recession has hit Nevada even harder than much of the rest of the country.
According to its June 5300 call report, Community One's net income fell 95.3% in the second quarter of this year. Its net worth ratio was 0.55%, compared with 1.97% as of March 31. Delinquencies to total loans hit 5.23%. The ratio of its delinquent loans to net worth was 809% as of June 30, compared with 230% in March.
America First FCU already has a presence in Las Vegas; it has 7,600 members and two branches in Clark County, where Las Vegas is located. With the five branches it acquired from Community One, it will have a total of 88 branches in Utah and Nevada.
Headquartered in Riverdale, Utah, America First FCU has $4.9 billion in assets and 495,939 members.
America First FCU Executive Vice President John Lund said while his credit union was concerned about the poor economic conditions in Las Vegas, it expects to prosper in that market once the economy turns around.
"In the long term it will be a great strategic move, though in the short term there are problems. But we are in a position to weather the storm," he said. "We were attracted to Community One because they are a good credit union, they didn't have enough capital to deal with the economic conditions."
Nevada has been especially hard hit by the recession. Its unemployment rate in June was 12.1% and Clark County's rate was 12.3%. The national unemployment rate was 9.5%.
Clark County had the nation's highest foreclosure rate during the first six months of 2009, according to RealtyTrac. In the county, 7.45% of all housing units were in foreclosure. That represents a 56% increase from the same period in 2008. Nationally, 1.6% of all housing units were in foreclosure during the first half of 2009, a 15% increase over the same period last year.
Real estate loans made up 42% of Community One's loan portfolio. Loans classified as "other," made up 50% of the portfolio, with unsecured loans making up the other 10%.
The NCUA and America First did not release a breakdown of what kinds of loans were in the "other" category.
It is the NCUA's fifth credit union liquidation this year and the second in which the NCUA helped facilitate a purchase and assumption by another credit union.
The NCUA and America First wouldn't provide details on the assistance the agency gave to America First to facilitate the purchase and assumption.